Last week I saw my very modest net worth drop 20% or so as the value of the won plummeted to the 1400 won/dollar mark (which itself came after slipping 20% since the beginning of this year). Then over the past two sessions it went back up over 13%.
The Korean stock market also plummeted and then rose again (6% today), in line with what is happening over in New York and Europe.
Most of my net worth is locked up in my apartment, which has been a sound investment. It has tripled in value since I bought it and its central location means it might weather the popping of the real estate bubble that is expected soon. Knock on wood. Anyway, my housing loan at Shinhan Bank is for only about one-fifth of the value of the apartment, so I feel good. I have no plans to sell my apartment anytime soon, so I can ride out the currency roller coaster for the time being.
But half the money I make is still in Korean won. Even while in Hawaii, my company does work for which I am paid in KRW that goes directly into an account for which I have a credit card, plus I have a tenant who pays me into the same account (half of which goes to pay my mortgage, but the rest which I am free to spend).
I had planned to actually spend that money every now and then in Hawaii (dorms, air fare, food, gas, etc.), but at 1400 won to the dollar, I might as well save it. Fortunately, I also have a modest income in US dollars, so I'm back to spending dollars in America and KRW when I'm in the ROK.
Okay, so this isn't so bad. I don't have much in the way of other investments, so I'm not feeling the pain of the stock market tumble, though I worry about how my retired parents are going to make ends meet.
I'm stoked that gas prices have gone down now. At the local Costco (the link is an interesting LAT read about Costco's busiest store), gas prices actually fell to $3.25/gallon, down from $4. My Honda Passport SUV, though I don't drive it much, is a bit of a gas guzzler. A good, rugged practical car for moving stuff around on Honolulu's pothole-ridden roads, but not exactly pocketbook-friendly. I miss the Kia Carnival, my environmentally friendly LP gas-powered pimped-out minivan, but I fill the tank on the Honda only about once every two weeks or more.
Too bad Costco in Korea doesn't sell gas.
A friend who will be going to Korea for about a year or two asked me whether or not it was a good time to bring in a bunch of money, in anticipation that the won will bounce back. I think it will, but I'm no expert.
I do think there are some housing opportunities for prospective buyers, especially people who are in the Seoul area forking out chunks of money for rent. Seriously, if you are interested in buying a small but decently built apartment in an okay neighborhood, email me. I'd like to turn the area into an enclave of decent "forean" folks that don't mind living away from places like Itaewon or the rest of Yongsan.
UPDATE (Wednesday, October 15, 2008 HST):
In Korea it is Thursday, and the Korean won dropped 133.5 won, 9.7% of its value. It is the single biggest one-day drop since December 31, 1997, at the height of the economic crisis we faced back then.
The roller coaster ride continues.Sphere: Related Content